Its Costa coffee chain is benefiting from the bad publicity over tax affecting rival Starbucks, while Premier Inn is getting a boost from the financial troubles at competitor Travelodge, which completed a financial restructuring in October, cutting its debt by half and giving lenders stakes in the business. Whitbread is gaining customers at the expense of both.

All aspects of Whitbread’s business are performing positively. In the year to date, like-for-like sales at Premier Inn rose 3.3pc, with total sales up 12.6pc. In its restaurant business, same-store sales rose 2.9pc, with the total up 9.8pc. Its Costa coffee business was very strong, with like-for-likes up 6.9pc and total sales up 25.3pc as more outlets opened.

Total third-quarter sales were up 14.4pc, and 14.3pc higher in the first nine months.

Significantly, the company’s Revpar – or revenue per available room – beat the wider market. This is an important metric in the hotel industry and it is calculated by multiplying a hotel’s average daily room rate by its occupancy rate.

In the third quarter, Revpar at Premier Inn grew 0.7pc compared with a fall of 5.4pc for the mid-range and economy hotel market as a whole. This is a strong performance when compared with the rest of the industry but some analysts had been hoping for significantly more. However, it does mean the group is on track to hit full-year expectations.

The company has an ambitious opening plan – that also includes expansion of Costa in China, where it already has about 100 outlets. By the end of year ending February 2016, Whitbread plans to have “at least” 65,000 Premier Inn rooms in the UK compared with the current 47,429. It wants to add 80 to 100 new restaurants to its 387 estate and double the size of Costa, with 3,500 stores worldwide compared with 2,203 at present.

The group does have a UK focus and the economic backdrop remains pretty uncertain. Whitbread conceded that trading was “challenging”. However, even in the worst year of the recent recession, earnings per share fell by only 3pc, so its model is pretty robust.

One thing that Whitbread’s Costa unit needs to learn from rival Starbucks relates to its rapid expansion. Starbucks hit the buffers in 2007 as it expanded too rapidly in the US. This led to an internal memo from Howard Schultz, the coffee chain’s founder, expressing concern that the group’s expansion was diluting the “brand experience” for customers. The cost of new openings also weighed on group margins.

Questor has not looked at Whitbread shares since September 2010, when a buy was recommended at £15.02. They have since performed very well.

Expansion plans should continue to boost operating profit, which has risen by almost 70pc over the past five years. Trading on a 2013 earnings multiple of 16, falling to 15 next year and yielding a prospective 2.3pc, the valuation looks pretty full.

Indeed, the average price target of the 16 City analysts monitored by Bloomberg is £23.63, some 5pc below the current price. Hold.